Jurisprudentiol – Tuesday's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.Central Excise

Immovable property purchased by petitioner in public auction conducted by bank under SARFAESI Act – Central Excise authorities cannot enter its charge in village land records for recovery of dues from mortgagee by claiming that they have first charge: Gujarat HC

PROVISO to section 11 permits the Department to recover its dues in a case where the person whose liability to pay the dues transfers or otherwise disposes of his business or trade in whole or any part or effects any change in the ownership thereof, and in consequence thereof, same person succeeds in such business or trade. In the present case, it is not a case of transfer of business or trade, but transfer of property under compulsory sale of the property through auction by the financial institution in exercise of powers under the SARFAESI Act.

Income Tax

Whether assessee is entitled to rebate for STT paid even if total income is computed u/s 115JB - YES: Karnataka HC

THE assessee is engaged in the business of purchase and sale of shares for more than a decade. It filed its return of income declaring taxable income as nil. The assessee had also made a payment of STT. The AO issued a notice u/s 148. The AO rejected the claim of the assessee for rebate on STT and computed the tax liability against the income computed u/s 115JB. The CIT (A) confirmed the said order. The Tribunal held that the rebate u/s 87 is to be granted from the amount of income tax chargeable on the total income of the assessee.

Service Tax

Since amounts of Passenger Service Fees and Airport Taxes collected by airlines were not for services provided by them, it is prima facie doubtful whether these can be considered as value of service rendered - Pre-deposit waived & stay granted: CESTAT

AS per Section 67 of the Finance Act, 1994, the value of any taxable service shall be the gross amount charged by the service provider for such service provided or to be provided. The amount in question is not paid for the services provided by the appellants and therefore, prima facie it is doubtful whether these can be considered as value of service rendered by them. We also note that in a similar case of SriLankan Airlines the Madras Bench has given full waiver vide decision reported at 2010-TIOL-1758-CESTAT-MAD.

See our columns Tomorrow for the judgements